Medicaidpays for over half of the nation's nursing home costs. To be eligible for Medicaid coverage of nursing home care, a person must have very low income and assets. Some people try to give away or hide their assets before applying for Medicaid, hoping by that strategy to keep their savings in their family but still have Medicaid pay for long-term care. Congress has passed a law to stop this asset-hiding. Now, any asset given away or transferred by a Medicaid applicant to someone else for less than its true value within 60 months of applying for Medicaid nursing home care is still considered as belonging to the applicant.
The other Medicaid rule that applies here makes a revocable trust useless as a Medicaid asset transfer no matter when it's created. That's because the person who creates a revocable trust -- also called a living trust -- still has full control over the assets in the trust. Because the person making the revocable trust could revoke it at any time and use the money in it, Medicaid counts the funds in the trust as still belonging to that person, thereby disqualifying the person from Medicaid coverage.